Fossil fuels are out, alternative energy is in and dozens of companies are likely to benefit from the transition.

Investors can use one security to capture these imminent gains.

Leaders of 192 countries are meeting at the U.N. Climate Change Conference in Copenhagen to iron out accords that will likely result in huge gains for a number of alternative-energy companies. One exchange-traded fund is poised to benefit from a surge in new business for them.

Most electricity is generated by burning coal or natural gas, though many governments are moving to embrace “cleaner” technologies that emit less carbon-dioxide, a compound thought to trap heat in earth’s atmosphere and contribute to a phenomenon known as global warming.

Hundreds of billions of dollars worth of existing fossil-fuel fired power plants notwithstanding, governments are increasingly more interested in promoting “renewable” energy sources like wind and solar power. These technologies not only reduce emissions, they also start to wean the world from scarce fossil-fuel-based sources.

#-ad_banner-#The two-week environmental confab in Copenhagen kicked off on Monday as presidents, premiers and prime ministers, along with thousands of other delegates, renewed efforts to come to an agreement on how to cut greenhouse gases. While the conference underscores alternative energy’s bright future, the most tangible proof is a spate of legislation in several countries to cut carbon emissions by using more alternative forms of energy.

China, for example, has mandated that 15% of its energy come from renewable sources by 2020. Solar and wind energy companies should see a huge boost from this mandate. China plans to increase wind energy by +720% from 12.2 gigawatts to 100 gigawatts by 2010. (A megawatt, or one million watts, is enough power for 1,000 homes. A gigawatt is 1,000 times that, or enough power for a million homes. One hundred gigawatts is about 10% of U.S. energy consumption.) China also has mandated more solar energy use, from 100 megawatts today to 20 gigawatts by 2020 — a +19,900% increase.

The majority of China’s 800 gigawatt electricity consumption is generated by coal (70%), followed by oil (20%) and hydroelectric (6%). China’s energy demand is rapidly growing, the head of China’s electric network said they plan to almost double electricity capacity by 2020. China needs to add another 700 gigawatts of electricity capacity to meet new demand and only 120 gigawatts is slated to be generated from solar and wind power, meaning there is still room for other alternative energy projects to be added between now and 2020. This is especially true if they plan to meet their 15% alternative energy target by 2020.

Many other countries have embarked on similar initiatives. In India, wind power is expected to add 10 gigawatts of power-generation capacity by 2012. Japan’s government provided $11 billion in its stimulus package to development cleaner power technology. The United States and the European Union are working on legislation aimed at reducing greenhouse gas emissions well below current levels.

Market Vectors Global Alternative Energy (NYSE: GEX) gives investors access to the world’s largest alternative-energy companies. This ETF isn’t laden with hundred of unprofitable startups but with 31 large, dynamic alternative-energy companies. GEX’s top ten holdings make up 53% of its assets.

The largest portfolio holding is Vestas Wind Systems (OTC: VWDRY). The company is an industry leader in wind system solutions, commanding about 19% of global demand for wind turbines. The Denmark-based company has installed more than 35,500 wind turbines in 63 countries.

The company shipped 979 turbines in the thamargin020d-quarter ended October 27, 2009, a +17% increase from the previous year. Even better, the company earned $244 million in the third quarter, a +70% increase year-over-year.

The second largest holding in GEX is First Solar (Nasdaq: FSLR), one of the largest solar panel manufactures in the world. The company is also one of the lowest cost producers in the industry. It’s no wonder why China gave First Solar a contract to build the largest solar farm ever. The two-gigawatt solar farm will be 25 times larger than any in the United States. First Solar earnings were $153 million in the third quarter ended September 26, 2009, a +54% year-over-year.

Government-Driven Investing editor Andy Obermueller recently identified Itron (Nasdaq: ITRI) as a leader in advanced electrical meters. The company’s “smart” meters are an important step in upgrading the antiquated U.S. power grid — a key Obama priority — to improve its efficiency. The Department of Energy recently made $3.4 billion in grants to utilities to buy smart meters. Itron is a key GEX holding.

GEX is an easy and cost-efficient way for investors to capture profits from the green movement and gain international exposure. The ETF has an expense ratio of 0.65% and is 58% invested in international companies. Only alternative energy companies with market caps greater than $100 million are considered for this fund.

That does not mean that there isn’t risk involved. Some forms of alternative energy are still in their infancy and may prove to not be economically viable. However, GEX’s concentration in larger, more established companies helps mitigate some of that risk.

GEX has lagged the overall market lately for a few reasons. For one, alternative energy projects became less attractive when oil, natural gas and coal prices plummeted from their peaks in 2008. When demand for electricity fell with the recession, building new power plants became less urgent. Even if a company had wanted to embark on a significant alternative-energy project, such endeavors cost billions of dollars, lending was tight during the financial crisis. The few companies that had cash were trying to figure out how to conserve it, not spend it.

Energy demand is already on the rise, and reducing carbon emissions is a goal for most countries — just ask the thousands at the Copenhagen conference. While the news surrounding the conference may give shares of alternative energy companies a pop in the short-term, it’s the long-term green legislations around the globe that will fuel these companies in the long-term, regardless of fossil fuel prices.